The Commerce Commission has received an application from Foodstuffs North Island Limited and Foodstuffs South Island Limited seeking clearance to merge.
Foodstuffs North Island and Foodstuffs South Island operate as separate co-operatives that focus on serving the island in which they are located. They each have retail offerings under the New World, PAK’nSAVE and Four Square banners, in the North and South Islands respectively. Foodstuffs North Island also has commercial wholesale offerings under the Gilmours and Fresh Connection banners. In addition, Foodstuffs South Island has retail offerings under the On the Spot and Raeward Fresh banners, and commercial wholesale offerings under the Trents banner and through some Raeward Fresh stores.
While operating as separate co-operatives, Foodstuffs North Island and Foodstuffs South Island currently provide support and assistance to one another as required and work together in a range of ways. They also share ownership of several other entities. These include Foodstuffs (N.Z.) Limited (a non-trading entity which represents the co-operatives’ interests on issues of national or grocery-specific importance) and Foodstuffs Own Brands Limited (which negotiates trading terms and pricing with national suppliers for products purchased and marketed under Foodstuffs’ private label brands).
The Commission expects to issue a statement of preliminary issues and call for submissions on the clearance application in mid-January.
A public version of the clearance application will be available shortly on the Commission’s .
Background
We assess mergers using the substantial lessening of competition test. This test asks whether a merger is likely to substantially lessen competition by comparing the likely state of competition if the merger proceeds with the likely state of competition if the merger does not proceed.
We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
